Group 1 - Morgan Stanley reaffirms "Overweight" rating for Grab Holdings (GRAB.US) with a target price of $5.65 [1] - Grab recently stated that it is not currently in negotiations to acquire competitor GoTo, indicating that a deal may not happen immediately, but future possibilities remain [1] - The potential merger between Grab and GoTo has been discussed multiple times over the past five years, and Morgan Stanley believes it could enhance profitability and returns for both companies [1] Group 2 - Indonesia is the largest online delivery service (ODS) market in Southeast Asia by gross merchandise volume (GMV), but intense competition has weakened unit economics, making it potentially the least profitable market [1] - As of Q1 2025, GoTo's ODS adjusted EBITDA margin is 2.0%, while Grab's overall ODS margin is 4.5% [1] - Grab's revenue contribution from Indonesia is projected to be 23% in 2025 [1] Group 3 - Both Grab and GoTo appear to be seeking to improve their profit margins, with Grab noting a more constructive competitive landscape in Indonesia [2] - Grab has increased its market share in the Indonesian ODS market over the past two quarters, while GoTo has adopted a more balanced approach, doubling its ODS margin from 1% in Q3 2024 to 2% in Q1 2025 [2] - Without a merger, there is a risk of renewed competition intensifying [2] Group 4 - Despite macroeconomic concerns, Grab's management is optimistic about trends, reporting a 19% growth in ODS GMV from April to May, following a 16% growth in Q1 [2] - Grab has a strong balance sheet, with net cash and short-term investments totaling $5.6 billion as of Q1 2025 [2]